CANADIAN OILPATCH / PIPELINE NEWS
November 8, 1996
PIPELINE BONANZA
ÿ Billions of dollars are being tossed on the table as a clutch of natural gas pipeline companies race to pump Western Canada's abundant natural gas to thirsty markets in the U.S. Midwest.
ÿ At the top of the list is the new Alliance Pipeline Ltd. partnership, whose open season to attract firm shipping commitments from gas producers ends at midnight tonight.
ÿ "We're working hard and we're very optimistic," says Alliance vice-president Jack Crawford, echoing industry opinion that the proposal will go ahead.
ÿ Alliance is one of six major pipelines being proposed or expanded, a flurry of investment that hasn't been seen in 20 years.
ÿ And Canada's $7-billion natural gas industry needs it.
ÿ The sector is losing at least $2 billion annually because of the $1 US per thousand cu. ft. price difference between Canadian and U.S. prices.
ÿ That differential is expected to decline to less than 50 cents US with the proposed pipeline expansions.
ÿ Although prices have rallied over the last two weeks, sustained equitable prices aren't expected until the first of the new pipeline projects start transporting gas in November 1998.
ÿ Alliance, a consortium of 18 mainly Calgary-based companies, plans to spend $3.6 billion laying pipe.
ÿ The 3,000-km pipeline would carry gas and natural gas liquids from Fort St. John in northeast B.C. to Chicago and would compete with TransCanada PipeLines Ltd. and Nova Corp.'s lines in Alberta.
ÿ Over the next few years, TCPL plans to spend between $4 billion and $6 billion to expand capacity on its mainline.
ÿ The company had its own recent "open season" to attract shippers, which spokesman David Annesley says received "terrific" response.
ÿ The company plans to spend $900 million expanding its line to ship 287 million cu. ft. daily by November 1997.
ÿ Another hot proposal is the contentious Palliser Pipeline project. Jointly owned by PanCanadian Petroleum and Westcoast Energy Inc., the 240-km line would carry up to one billion cu. ft. daily from an area northeast of Calgary to the Saskatchewan border by November 1998.
ÿ Northern Border Pipeline Co.'s long-awaited $793-million US expansion project is expected to be completed by November 1998.
ÿ Owned by Enron Corp. (70%) and TCPL (30%) Northern Border -- which runs a line from Monchy, Sask., to Harper, Iowa -- proposes to build new line to Chicago, and carry 2.4 billion cu. ft. a day, an increase of 700 million cu. ft. a day.
ÿ Two controversial gas pipeline projects are also proposed for the East Coast Sable Island field. |
